Nonprofit Resources

CapinCrouse Lease Toolkit

To assist your nonprofit organization in planning for and implementing the new accounting standard for leases, CapinCrouse has developed a timely and helpful Lease Toolkit.

But first, let’s look at how the lease standard has changed.

 

Overview of the New Lease Standard

In early 2016, the Financial Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU) on financial reporting for leasing transactions. The ASU amends the FASB Accounting Standards Codification by creating Topic 842, Leases, which provides an overhaul of the prior lease standard.

The new standard:

• Requires organizations to record a right-of-use asset and related lease liability for substantially all their leased assets.
• Updates the definition of a lease and enhances lease-related disclosures. A lease is now defined as a contract, or part of a contract, that conveys the right to control the use of identified property, plant, or equipment (an identified asset) for a period of time in exchange for consideration.

Like the prior lease standard, there are two classifications of leases in the new standard. Previously the lease classes were operating and capital; the new lease classes are operating and finance. The distinction between the classes in the new standard is very similar to that of the prior lease standard.

Under the prior standard, organizations focused on whether a lease was an operating or a capital lease, as that determination would necessitate whether or not a lease was recognized on the statement of financial position. The financial impact of an operating lease and a service contract would be similar; therefore, not as much focus was placed on the prior lease definition.

Under the new standard, the initial key determination will be whether a contract is or contains a lease, as that will necessitate whether a contract is recognized on the statement of financial position. Organizations should reassess their contracts to ensure they have identified all leases under the new standard.

While the FASB has delayed the implementation date of the new lease standard for nonprofits to fiscal years beginning after December 15, 2021, organizations should not postpone their implementation strategy. The implementation date is fiscal years beginning after December 15, 2019 for nonprofits that have issued, or are a conduit bond obligor for, securities that are traded, listed, or quoted on an exchange or an over-the-counter market.

 

Additional Changes

In November 2021, the FASB issued ASU 2021-09, which expanded the existing policy election for not-for-profit entities to use a risk-free rate by class of underlying asset rather than the previous requirement to make the election for all leases.

The CapinCrouse Lease Decision Guide and Lease Information Gathering Forms have been updated to reflect this change. If you downloaded these resources in 2021, please use the form below to receive the updated versions.

 

Your Implementation Toolkit

The CapinCrouse Lease Toolkit is designed to assist your organization with implementing Topic 842. These resources can help you:

1. Understand the new standard
2. Extract necessary information from your lease contracts
3. Generate the related lease calculations and disclosures

The Lease Toolkit contains a helpful reference guide, information gathering form, and lease calculation tool. Fill out the form at the bottom of the page to download these free resources.

 

CapinCrouse Key Lease Decision Reference Guide

The CapinCrouse Key Lease Decision Reference Guide will aid you in understanding the new lease standard, from the initial key determination of whether a contract is or contains a lease through the accounting calculations and disclosure summary.

The guide covers:

• The changes made to lessee accounting
• Common aspects of a lease contract that influence how an organization classifies and accounts for the contract
• Key decisions your organization will need to make when implementing the new standard

 

CapinCrouse Lease Information Gathering Form

Our Lease Information Gathering Form is designed to be used in conjunction with the Key Lease Decision Reference Guide to help you extract and summarize the key lease decisions into one summary document.

The form follows the order of the guide so you can easily refer to the definitions. Once your organization has completed this form for each lease, you will have all the information for your lease calculations compiled in one document.

 

Lease Calculation Tool

You can use the CapinCrouse Lease Calculation Tool to produce the amortization table and journal entry summary for each of your leases. The tool will then consolidate all the necessary disclosures from each of your organization’s leases into one easy-to-use table for financial statement purposes.

 

CapinCrouse Is Here to Help

The CapinCrouse Lease Toolkit can make the implementation of the new lease standard more efficient and effective. Please contact us with questions or to discuss how we can help your organization with this process.

 

Fill out this form to download your free CapinCrouse Lease Toolkit:

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